The chief executive of Seoul Semiconductor, Korea's top supplier of light-emitting diodes (LED), said that consolidation is taking place in the industry as vendors and their customers work to keep their operating costs as low as possible.

CEO Lee Chung-hoon says that the company will be one of a few survivors in the next few years because it is well-positioned to reap outsized rewards from its technology advancement.

"Structural recovery will be happening in the next one to two years. It's too early to say that the industry's major players will see a huge increase in profits. But companies that have patents and technology will surely survive after the consolidation," Lee said.

He said the global LED industry is following steps that the semiconductor industry experienced a few years earlier.

After bankruptcies and exits, the chip industry is now being controlled by three players - Samsung, SK hynix and Micron Technology.

"The next two years will be critical. The new memory paradigm is enabling higher and more stable profits for Samsung Electronics and SK hynix. The LED industry will be restructured and Seoul Semiconductor will survive thanks to its technology and competitive patent portfolios," the CEO said.

If a new order prevails in the LED industry, then a few major players could play an important role to balance supply and demand because no one can afford to destroy the prosperity of the industry by focusing more on balance and for the development of next-generation technology.

The CEO agreed with this as he expects global LED demand to grow by 120 trillion won.

"We see a lot of cheap Chinese suppliers. However, Seoul Semiconductor's competitiveness lies in its strength to guarantee on-time delivery, better pricing and output commitment, as we have a vertically integrated business structure," he said.

Seoul Semiconductor manages chip packaging and module businesses as well as chip manufacturing. Lee said that he aims to acquire up to 20 percent of the global market and 10 trillion won in annual sales.

"If we cut the number of workers and costs, then this will help us improve profits. But this is a short-term strategy. This shouldn't be an answer," he said.

To a question about increased production by Chinese manufacturers due to Beijing's initiatives, the CEO said, "As China has stopped providing incentives for domestic LED firms; I cautiously think supply growth will soon be limited."

By: DocMemory
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